Russia-Ukraine War Escalation Impact on Markets

What happened: On April 11, Russia suffered one of its worst military air disasters in Ukraine, with a Russian An-26 transport plane crashing in Crimea, killing all 29 on board. Meanwhile, Russia launched its largest one-day drone blitz of the war on April 10, killing at least seven Ukrainians. Ukrainian President Zelensky called for an Easter truce, but Russia continues nightly drone assaults. Peace talks between Ukraine and Russia have been suspended indefinitely due to the Iran war. A damaged Russian LNG tanker is adrift in the Mediterranean, potentially posing an ecological disaster.

Market impact: The escalation in the Russia-Ukraine war is disrupting global supply chains and impacting energy and metal markets. Russian oil exports, including from the key Baltic port of Primorsk, are under threat, driving up energy prices. The Ukrainian aluminum supply chain is also affected, with an Irish refinery linked to Russian smelters. The potential ecological disaster from the drifting Russian LNG tanker could further roil energy markets.

What to watch next: On April 18, the EU will review its sanctions against Russia. On April 20, the US will release its monthly crude oil production report, which could provide insight into how the war is affecting global energy supply. On May 5, the UK will hold local elections, which could signal domestic support for the government's stance against Russia.